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Title: Assessing the impact of the global financial crisis on the profit efficiency of Indian banks
Authors: Gulati, Rachita
Kumar S.
Published in: Economic Modelling
Abstract: With the objective to assess the impact of the global financial crisis on bank efficiency in India, the study focuses on the evolution of profit efficiency before, during and after the crisis. For evaluating and comparing the risk-adjusted alternative profit efficiency of different ownership groups in the Indian banking industry, the study employs a DEA-based meta profit frontier framework that accounts for technological heterogeneity across groups. The results highlight that profit efficiency of banks declined mildly during the global financial crisis, but then recovered quickly after the crisis. However, the global financial crisis had a differentiated impact across ownership groups. New private banks observed largest drag in the profit efficiency during the crisis years. The analysis of technology gap ratio provides that foreign banks employed best-practice production technology, and were observed to be the technology leaders of the Indian banking industry. Overall, we found no long-lasting adverse effect of the global financial crisis on the profit efficiency of the Indian banking sector due to the adoption of accommodative macro policies aiming at injecting sufficient liquidity in the system. © 2016 Elsevier B.V.
Citation: Economic Modelling (2016), 58(): 167-181
Issue Date: 2016
Publisher: Elsevier
Keywords: Data envelopment analysis
Global financial crisis
Meta profit frontier framework
Profit efficiency
ISSN: 2649993
Author Scopus IDs: 26221190300
Author Affiliations: Gulati, R., Department of Humanities and Social Sciences, Indian Institute of Technology Roorkee, Roorkee, Uttarakhand, 247667, India
Kumar, S., Faculty of Economics, South Asian University, New Delhi, 110021, India
Corresponding Author: Kumar, S.; Faculty of Economics, South Asian UniversityIndia; email:
Appears in Collections:Journal Publications [HS]

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